[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5312 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 5312

  To support business incubation in academic settings, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 26, 2002

  Mr. Tierney (for himself, Mr. Sawyer, Mr. Shimkus, Ms. Baldwin, Mr. 
Horn, Mr. Gonzalez, Mr. Kennedy of Rhode Island, Mr. Phelps, Mr. Davis 
 of Illinois, Mr. Udall of New Mexico, Mr. Visclosky, Mr. Serrano, Mr. 
 Brown of Ohio, Mr. Hilliard, Mr. Stark, Mr. Hinojosa, Mr. Payne, Mr. 
Andrews, and Mr. George Miller of California) introduced the following 
    bill; which was referred to the Committee on Education and the 
                               Workforce

_______________________________________________________________________

                                 A BILL


 
  To support business incubation in academic settings, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Linking Educators 
and Developing Entrepreneurs for Reaching Success (LEADERS) Act of 
2002''.
    (b) Findings.--Congress makes the following findings:
            (1) Business incubators housed in academic settings provide 
        unique educational opportunities for students, provide 
        entrepreneurs with enhanced access to a skilled workforce, and 
        bring a wealth of resources to business, academia, and 
        communities.
            (2) Academic affiliated incubators bridge the missions of 
        academic institutions by bringing together education, economic 
        development, and technology commercialization efforts.
            (3) Studies have shown that incubator tenant companies have 
        an average success rate of 87 percent, and 90 percent for 
        technology-based incubator tenant companies. These success 
        rates are dramatically higher than the success rates for 
        companies in the general economy.
            (4) Incubator companies are also more likely to remain in 
        the same communities as they grow and to provide high paying 
        jobs and benefits to their employees.
            (5) Business incubators help academic institutions 
        contribute to local goals of sustaining economic development in 
        their surrounding communities.
            (6) Education in entrepreneurship and other business 
        formation skills is essential to business success and 
        sustainable economic development.

SEC. 2. PURPOSE.

    The purpose of this Act is to encourage entrepreneurship by 
increasing the role for academia in entrepreneurship by providing space 
and expertise in an academic setting to house and support new and 
emerging small businesses.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Degree-granting institution.--The term ``degree-
        granting institution'' means an institution of higher 
        education, as defined in section 101 of the Higher Education 
        Act of 1965 (20 U.S.C. 1001), that awards an associate or 
        baccalaureate degree.
            (2) Incubator.--The term ``incubator'' means an entity 
        affiliated with or housed in a degree-granting institution that 
        provides space and coordinated and specialized services to 
        entrepreneurial businesses which meet selected criteria during 
        the businesses' startup phase, including providing services 
        such as shared office space and services, access to equipment, 
        access to telecommunications and technology services, flexible 
        leases, specialized management assistance, access to financing, 
        and other coordinated business or technical support services.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.

SEC. 4. PROGRAM AUTHORIZED.

    (a) In General.--The Secretary is authorized to support the 
establishment and development of incubators.
    (b) Allocation of Funds.--From the amount appropriated under 
section 9, the Secretary--
            (1) shall use 80 percent of the amount to--
                    (A) make awards, on a competitive basis, in amounts 
                of $500,000 to $750,000, to help acquire or renovate 
                space for incubators; and
                    (B) make awards, on a competitive basis, in amounts 
                of $50,000 to $150,000, for developing curricula, 
                providing services (including preparing corporate 
                charters, partnership agreements, and basic contracts, 
                assistance with patents, trademarks, and copyrights, 
                and technology acquisition services), or providing 
                programming for entrepreneurs housed in an incubator;
            (2) shall use 10 percent of the amount to make awards, on a 
        competitive basis, in amounts of $50,000 to $150,000, for 
        feasibility studies for determining the need for or siting of 
        incubators; and
            (3) shall use 10 percent for research regarding best 
        practices for incubator programs, including the development of 
        a benchmarking system based on uniform measures, and for 
        dissemination of information regarding such practices.
    (c) Contracts.--The Secretary is authorized to contract with 
organizations with expertise in business incubation practices for the 
purposes of carrying out subsection (b)(3).
    (d) Recipients.--The Secretary shall make an award--
            (1) described in subsection (b)(1) to a nonprofit entity 
        that has a strong affiliation with a degree-granting 
        institution and manages or provides technical assistance to the 
        degree-granting institution's affiliated incubator, or if no 
        nonprofit entity manages or provides technical assistance to 
        the incubator, to the degree-granting institution managing the 
        incubator; and
            (2) described in subsection (b)(2) to a degree-granting 
        institution, or a nonprofit municipality, city, township, or 
        community development organization.

SEC. 5. USES OF FUNDS.

    Funds awarded under section 4(b)(1)(B) may be used for--
            (1) curriculum, training, or technical assistance developed 
        by academic faculty with participation from entrepreneurship 
        experts and local government leaders;
            (2) programming that contributes to a coordinated set of 
        business assistance tools, such as developing management teams, 
        providing workforce development, forming strategic alliances, 
        developing capital formation networks, and developing 
        customized plans to help entrepreneurs meet the challenges of 
        doing business in their specific communities; and
            (3) hiring staff to coordinate the activities described in 
        paragraph (1) or (2) or for curriculum development.

SEC. 6. APPLICATIONS.

    (a) In General.--Each entity desiring assistance under this Act 
shall submit an application to the Secretary at such time, in such 
manner, and accompanied by such information as the Secretary may 
require.
    (b) Contents.--Each application shall contain an assurance that the 
activities to be assisted--
            (1) have the support of the municipality, city, or township 
        in which the incubator is housed or proposed to be housed; and
            (2) are consistent with the local economic development plan 
        or strategic master plan.
    (c) Priority.--The Secretary shall give priority to funding 
applications under this Act that provide strong educational 
opportunities to students in entrepreneurship, and that require 
significant collaboration between businesses, academia, and local 
government and economic development leaders.
    (d) Consideration.--
            (1) In general.--In addition to applications from other 
        appropriate sources, the Secretary may give consideration to 
        funding applications under this Act that support--
                    (A) the building of new incubators;
                    (B) incubators located in economically distressed 
                areas;
                    (C) incubators with successful graduation rates for 
                tenant companies;
                    (D) incubators that have shown demonstrable 
                economic benefits in their surrounding communities;
                    (E) incubators that work with faculty entrepreneurs 
                or university-based research; or
                    (F) incubators located in rural, inner-city areas, 
                or Indian reservations or pueblos where the presence of 
                an incubator may enhance and diversify the area's 
                economy through expanded technology commercialization.
            (2) Definition of consideration.--In this subsection, the 
        term ``consideration'' does not mean priority.

SEC. 7. MATCHING FUNDS.

    Each entity receiving Federal assistance under section 4(b)(1) 
shall contribute matching funds, in an amount equal to the amount of 
Federal assistance received under this Act, toward the costs of the 
activities assisted under this Act. The non-Federal share required 
under this section may be provided in the form of in-kind 
contributions.

SEC. 8. REPORT.

    The Secretary, at the end of the third year for which assistance is 
provided under this Act, shall prepare and submit to Congress a report 
that--
            (1) describes the most effective or innovative additions to 
        curricula developed under this Act;
            (2) contains a comparison of small business survival rates 
        for small businesses that started up in incubators versus small 
        businesses that did not so start;
            (3) describes factors leading to any success of incubator 
        businesses;
            (4) describes the best role for degree-granting 
        institutions in business incubation; and
            (5) contains a comparison of academic-affiliated incubators 
        of specific missions and ages supported under this Act with 
        incubators with similar missions and ages that are not 
        supported under this Act.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this Act 
$20,000,000 for each of fiscal years 2003, 2004, and 2005.
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